How Labour blew £250million on private surgery that never took place

Labour squandered £252million by paying private companies for operations on Health Service patients that were never carried out, it emerged yesterday.

Private healthcare firms were paid £1.689billion in advance over a seven-year period to carry out procedures such as hip replacements and cataract operations.

But in a shocking example of the last Government’s wasteful spending only £1.437billion worth of procedures were actually performed – meaning £252million went into the pockets of private firms for doing nothing.

Labour wasted £252million by paying for operations that were never carried out. The payments came at a time when the NHS was routinely refusing people life-extending cancer drugs - claiming they were too expensive to afford

The vast sum handed out for ‘phantom operations’ between 2003 and 2010 could have paid the salaries of more than 1,700 nurses over that time.

The payments came at a time when the NHS was routinely refusing people life-extending cancer drugs – claiming they were too expensive to afford. In the worst example, one NHS region – West Midlands – paid private firms 17 times the amount of money they should have received.

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The figures, obtained by Lib Dem MP Stephen Gilbert through a parliamentary question, show that in 2007, the region agreed to pay firms £11.1million – but the value of the operations they carried out was only £649,000.

Across the country, some 15 per cent of the money paid out over the seven years was for ‘phantom operations’. In one year, 2005, it was 26 per cent.

Handing out billions before work is done is a classic public sector blunder. It’s foolish and shows a lack of regard for taxpayers’ money.

‘Although the private firms have made improvements to waiting times, the NHS has failed to buy their services with the business sense that is needed to survive in the real world.’

Tony Blair introduced privately-funded ‘treatment centres’ in an attempt to cut huge NHS waiting lists, which Labour had inherited from the Conservatives. But, in its eagerness to persuade healthcare firms to bid for contracts, the NHS agreed to pay them up front for an agreed number of operations every year.

The number of procedures that actually took place was never as high as anticipated, meaning the private firms made a killing.

Many of the companies are foreign, such as UnitedHealth from the U.S. and the South African firm Netcare.

The waste contributed to the sharp drop in NHS productivity seen over Labour’s time in office.

But the treatment centres did help cut waiting times from the 18 months common under the Tories to the 18-week maximum now.

Revelations over ‘phantom operations’ come weeks after it emerged that Labour had also wasted vast sums on hospitals built under the private finance initiative.

Mr Gilbert said: ‘Patients will rightly be asking why the last Labour government allowed hundreds of millions of pounds, which could have been spent on front-line care, to instead be spent on lining the pockets of private providers.’

The Coalition has moved to stamp out the practice, by banning the Health Service from paying private firms more than it pays NHS hospitals to carry out procedures.